Federal Court hits Google with $55m fine for anti-competitive search engine deals with Telstra and Optus

Internet giant Google will be forced to pay a $55 million fine for signing anti-competitive deals with the nation’s two largest telcos that banned the pre-installation of competing search engines on smartphones. Federal Court Justice Mark Moshinsky approved the fine proposed by the Australian Competition and Consumer Commission on Tuesday, finding it should be significant enough to deter future anti-competitive behaviour. The penalty is one of the largest issued to the US tech giant, second to a $60 million fine ordered by the court in 2022 for secretly collecting location data from some Android phone users. The competition watchdog launched legal action against Google Asia Pacific in August over deals with Telstra and Optus that ran from December 2019 to March 2021. The contracts required the telcos to pre-install Google’s Search app on Android smartphones, set it as the default search option on the devices, and banned the pre-installation of competing search services. In exchange, the telecommunications companies receive a share of advertising revenue from Google search results shown on the devices. Google had admitted the deals and agreed with the commission that they were “likely to have the effect of hindering competition within the market in Australia,” Justice Moshinsky said in his findings. The $55 million penalty proposed by the commission and agreed to by Google was within the appropriate range for the law, he said, and should discourage similar anti-competitive acts. “The cases emphasise that the primary if not sole purpose of civil penalties is deterrence of further contravening conduct of a like kind,” Justice Moshinsky said. “I’m satisfied that the proposed total penalty is a sufficiently significant figure to achieve the object of deterrence, both specific and general.” Telstra, Optus and TPG have signed court-enforceable undertakings not to make similar anti-competitive arrangements with the tech company in future, and the commission’s lawyer told the court it would not seek further action against the telcos. Stamping out anti-competitive behaviour on digital platforms was vital to ensuring consumers could access the best technology for their needs, commission deputy chair Mick Keogh said, particularly as more advanced, artificially intelligent options emerged. “This penalty should send a strong message to all businesses that there are serious and costly consequences for engaging in anti-competitive conduct,” he said. “Search tools, including those that incorporate AI, are rapidly changing how we search for information and it’s critical that competitors to Google can gain meaningful exposure to Australian consumers.” The court ruling comes nine months after the commission wrapped its five-year inquiry into Digital Platform Services, which recommended mandatory codes of practice to boost competition and greater protections against unfair trading practices. Google dominates web search queries in Australia, with Statcounter estimating it delivered 91 per cent of search results over the year to November, followed by Bing (6.2 per cent) and Yahoo (1.35 per cent).